IN119: Deductions in respect of improvements to land or buildings not owned by a taxpayer

IN119 provides guidance on the interpretation and application of the following:

• Section 12N of the Income Tax Act (“the Act”), which facilitates allowances under specified sections of the Act for improvements made to land or buildings not owned by a taxpayer but over which the taxpayer holds a right of use or occupation. The improvement must be effected under a Public Private Partnership, a lease agreement with the state or certain other tax exempt statutory bodies and the state or that body owns the land or building, or under the Independent Power Producer Procurement Programme.
• Section 12NA of the Act, which deals with deductions for improvements effected under a Public Private Partnership by a person to land or to a building over which the state holds the right of use or occupation.

Other sections in the Act, which potentially provide an allowance on improvements to land or buildings not owned by the taxpayer, include section 11(g) and section 13bis. These sections are not dealt with in IN119. See IN110 on “Leasehold Improvements” and IN105 on “Deductions in respect of Buildings used by Hotelkeepers”.

A copy of IN119 can be accessed here. 

20/05/2022